Tolkien trilogy director rings up record $20m to remake King Kong

Peter Jackson, the New Zealand filmmaker responsible for the marathon Lord of the Rings trilogy, will be paid $20m (£12.4m) - the biggest director's fee in cinematic history - to remake King Kong, it was reported yesterday.

The hulking payment by Universal Studios puts Jackson in the same earnings league as Hollywood's A-list actors, and confirms his status as director-superstar.

The deal marks the fulfilment of a childhood dream for Jackson, who said he had first been inspired to make films by watching the 1933 original when he was nine years old.

He originally signed an agreement with Universal to make King Kong in 1997, before he made his name as an epic director with the Lord of the Rings.

But the studio got cold feet on hearing that it would be competing for box office appeal in the same year as two other monster movies: Sony's Godzilla and Disney's Mighty Joe Young. Work was stopped on the project, and Mr Jackson moved on to make the Tolkien trilogy.

He is due to return to his King Kong as soon as he finishes putting the finishing touches to the third Lord of the Rings episode, The Return of the King. The King Kong remake is due out at Christmas 2005, Variety magazine reported.

Jackson is expected to approach the classic story of girl meets ape more reverently than Dino De Laurentiis, who directed the 1976 remake as a camp and tongue-in-cheek semi-parody set in contemporary America.

In that version, Jessica Lange played the heroine role rendered iconic by Fay Wray in the original, but unlike her predecessor, develops a soft spot for the giant gorilla, played by an actor in a monkeysuit, and weeps for him when he falls to his death from the World Trade Centre.

It is not known whether the grand finale will return to its original venue, the Empire State Building, in Jackson's version but he will take the action back to the 1930s, with a big role for biplanes.

He is also expected to make more of the opening scenes on Skull Island, the Asian jungle where Kong is captured. Many of those scenes will be shot in New Zealand with jungles added by Jackson's special effects workshop, Weta Ltd, which will also recreate the mayhem wrought by the giant gorilla in New York.

By shooting the film close to home, Jackson may save Universal more money than it pays him, as the New Zealand government has promised tax-exempt grants for filmmakers equivalent to 12.5% of total spending. Jackson will have to share his fee with his partner, Fran Walsh, and Philippa Boyens, who helped them write The Lord of the Rings scripts.

A few other directors, such as Steven Spielberg and Robert Zemeckis, have made more from their movies than Jackson's $20m, but most of their proceeds came from a percentage share in the gross earnings. According to Variety, Jackson's fee represents a lump sum record.

He has already made cinematic history becoming the first person to direct three major films simultaneously. Jackson and Walsh made their name with the low-budget 1994 film, Heavenly Creatures, a true story about a murderous pair of New Zealand girls, and they had been reported to be planning a similarly modest movie as an antidote to the Tolkien epics. Those plans have now been put on hold.

A number of studios had been vying for Jackson's services, after the first two episodes of The Lord of the Rings grossed an extraordinary $1.8bn (£1.1bn). The whole trilogy cost $350m (£217m) to make. But Universal had the trumpcard. It holds the rights to King Kong.

"No film has captivated my imagination more than King Kong," Jackson said. "I'm making movies today because I saw this film when I was nine years old. It has been my sustained dream to reinterpret this classic story for a new age."

"The story of Kong offers everything that any storyteller could hope for: an archetypal narrative, thrilling action, resonating emotion and memorable characters. It has endured for precisely these reasons and I am honoured to be a part of its continuing legacy."